SFS closes Italian arm after restructure

By Antonio Fabrizio May 1, 2008

The Italian rental and leasing arm of Siemens Financial Services (SFS) has ceased new business activities,Leasing Life can reveal.

Siemens Finanziaria and Siemens Renting, part of SFS Commercial Finance division in Europe and Asia-Pacific, made the decision last month to “cease all new business activities except for some major vendor relationships”, a company spokesperson said.

The company, which specialises in IT, healthcare and telecoms equipment in the SME sector, said the decision forms part of a strategic review undertaken by SFS worldwide.

In a statement to Leasing Life, the company said the move “aims to lever its current competitive advantage and its solid financial position to focus its resources on supporting Siemens and other customers’ requirements in other parts of its organisation.”

The company declined to comment on whether the business was profit-making or whether SFS as a whole planned to end any activities elsewhere.

According to a well-placed source, the recent decision could be linked to SFS not reaching its return on equity (ROE) targets.

Because it is backed by the Siemens conglomerate, ROE is the most important target for SFS, the source said.

As a whole, the company’s set target is 20-23 percent. According to SFS figures, in the last quarter it reached 23.4 percent, which was still above target, but much lower than 2007’s 35.6 percent record.

If large amounts of investment were needed by the Italian arm to reach ROE targets then it might have been cheaper for Siemens simply to cease business activities, the source said.

At the beginning of 2008, SFS sold its two Hungarian businesses, Siemens Leasing Kft and Siemens Finance Zrt, to Dutch lessor De Lage Landen.

The company said it made the decision because the Hungarian businesses did not fit with the firm’s new investment strategy.